The project is supported by VEB.RF and a syndicate of banks under the Project Financing Factory programme

Ecolant LLC has started to build Russia’s first large integrated steel mill compliant with modern environmental standards in Vyksa, Nizhni Novgorod Region. Work began on constructing the main building. The federal agency in charge of state expert reviews had examined the design documents and engineering surveys and given its approval to the project.

The project involves building about 100 facilities for eight process lines: direct reduced iron (DRI), smelting, air separation, water treatment for water reuse, limestone calcination, by-product processing, railway and road logistics, power supply.

The Ecolant mill uses domestic and imported equipment. Auxiliary equipment will be supplied by Uralmashplant, Troitsk Crane Plant, Tekvin, Aquateco etc. Primary process equipment is to be designed, made and installed by Danieli, Italy, and Primetals, Austria. Project design work is done by the Magnitogorsk Design Institute for Iron and Steel Works and other Russian organisations. The supply of primary and auxiliary equipment is scheduled for 2022–2023. Ecolant will be put into operation in 2025.

The Ecolant project uses the special investment contract mechanism and funding from a syndicate of VEB.RF, Sberbank and Otkritie Bank through VEB.RF’s Project Financing Factory. The project budget totals about 150 billion roubles.

“The Ecolant green steelmaking project is unique; it uses solutions aimed at reducing adverse environmental impacts, achieving a threefold decrease in carbon dioxide and sulphur oxide emissions compared with conventional blast furnace technology. This is due to the introduction of DRI green technology into the Russian market. And the project will receive government support: we signed a special investment contract in June 2021. The mill has the annual capacity to produce 1.8 million tonnes of high-grade steel slabs and rods, with a considerable amount of investment,” said Denis Manturov, Minister of Industry and Trade of the Russian Federation.

“The Ecolant project is important to the Nizhni Novgorod Region for several reasons. First of all, this is the largest investment project creating about 700 jobs. The project is a major step in the development of Vyksa and the region as a whole. When put into operation, the Ecolant mill will substantially increase gross regional product. Additionally, Ecolant is really a world-class project at the cutting edge of technology, including carbon footprint reduction. These are tasks currently set by Russian President Vladimir Putin,” said Gleb Nikitin, Governor of the Nizhni Novgorod Region.

“Steel mill construction in the Nizhni Novgorod Region is one of the largest projects launched in 2021 through the Project Financing Factory. Our syndicate has already funded the purchase of high-tech equipment, and we are ready to begin financing construction and installation. The project is well ahead of schedule. The construction of such facilities is consistent with the Sustainable Development Goals and helps the Russian economy to adapt to global energy transition,” said Nikolay Tsekhomsky, First Deputy Chairman and member of the Management Board, VEB.RF.

“We signed the agreement to finance the construction of this unique steel mill in Vyksa last year, and several months later, we can see the syndicated loan turning into a tangible thing. The Ecolant project is a shining example of the fact that even such carbon-intensive industries as steelmaking can and should have green production facilities. Contributing towards the transition to carbon neutrality in the Russian economy is a priority for Sber, so we will continue to provide all possible support for green projects,” said Alexander Vedyakhin, First Deputy Chairman of the Executive Board, Sberbank.

“We are happy to see project financing for Ecolant is successful. Reaching the construction phase shows that the project is going fast, which means Russia will soon have steel production with low carbon intensity meeting the needs of modern society. It’s extremely important for Otkritie to participate in the project because it’s fully consistent with the concept of responsible investment,” said Viktor Nikolaev, Deputy President & Chairman of the Management Board, Otkritie Bank.

“We’ve invested more than 6 billion US dollars in business development in the past 15 years. The successful start of building the first green steel mill is further proof of our extensive experience in carrying out large-scale projects. When put into operation in 2025, Ecolant will make the Russian steel industry more competitive, increase the share of high value-added domestic production, support the transition to decarbonised industrial production and contribute to economic growth in the country in general. Steel products with a low carbon footprint for the Russian energy and transport sectors will be fully consistent with the national and global green agendas,” said Anatoly Sedykh, Chairman of the Board of Directors, ОМК (project initiator).